June 26, 2017

Short-Term High-Probability, Mean-Reversion Indicator. Historical Seasonal Trend Holds True.

The seasonal bullishness that occurs the day before Thanksgiving held true again this year as the S&P advanced 1.5% on low volume. The day after Thanksgiving also is bullish, but as I mentioned in earlier posts the next two days, which would be Monday and Tuesday of next week, are overwhelmingly bullish on a seasonal basis.

Currently, Retail (RTH) and Semiconductors (SMH) are the only two sectors that are displaying an overbought reading, but neither have an RSI (2) that is even above 90. Preferably I like to see a reading above 95 before I will seriously consider stepping into a trade in the High-Probability, Mean-Reversion Strategy.

So, hopefully, Friday brings more of the same low-volume advance which is enough to push a few of the ETFs I follow into an extreme state. If indeed that occurs next week could bring quite a few nice set-ups.

Until then, keep enjoying the holiday!

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Short-Term High-Probability, Mean-Reversion Indicator – as of close 11/24/10

Benchmark ETFs

* S&P 500 (SPY) – 54.7 (neutral)
* Dow Jones (DIA) –52.1 (oversold)
* Russell 2000 (IWM) – 69.0 (neutral)
* NASDAQ 100 (QQQQ) – 61.4 (neutral)

Sector ETFs

* Biotech (IBB) – 64.9 (neutral)
* Consumer Discretionary (XLY) – 64.8 (neutral)
* Health Care (XLV) – 48.1 (neutral)
* Financial (XLF) – 42.5 (neutral)
* Energy (XLE) – 58.5 (neutral)
* Gold Miners (GDX) – 54.6 (neutral)
* Industrial (XLI) – 62.6 (neutral)
* Materials (XLB) – 56.2 (neutral)
* Real Estate (IYR) – 58.1 (neutral)
* Retail (RTH) – 70.5 (overbought)
* Semiconductor (SMH) – 79.1 (overbought)
* United States Oil Fund (USO) – 58.6 (neutral)
* Utilities (XLU) – 41.0 (neutral)

International ETFs

* Brazil (EWZ) – 46.4 (neutral)
* China 25 (FXI) – 40.0 (neutral)
* EAFE (EFA) – 41.4 (neutral)
* South Korea (EWY) – 49.2 (neutral)

Commodity ETFs

* Gold (GLD) – 59.4 (neutral)

Ultra Extremes

* Small Cap Bear 3x (TZA) – 29.8 (oversold)
* Small-Cap Bull 3x (TNA) – 68.4 (neutral)
* UltraLong QQQQ (QLD) – 61.3 (neutral)
* Ultra Long S&P 500 (SSO) – 54.3 (neutral)
* Ultra Short S&P 500 (SDS) – 43.7 (neutral)
* UltraShort 20+ Treasury (TBT) – 58.7 (neutral)

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Kindest,

Andy